Saudi Arabia wants an end to arms race in region

King Salman chairs the weekly Cabinet session in Riyadh on Tuesday. (SPA)
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Updated 26 February 2020

Saudi Arabia wants an end to arms race in region

  • Kingdom’s plans to develop Jafurah gas field lauded

RIYADH: The Cabinet on Tuesday reiterated its stance to support international efforts for regional disarmament and expressed its concern over the Iranian role that is detrimental to the peace and stability of the Middle East.
The meeting, chaired by King Salman, expressed its concern over Tehran’s announcement of downgrading its commitment to the 2015 nuclear agreement and an escalation of threats from terrorist armed militias supported by the Iranian regime.
The ministers also discussed a UN project, funded by Saudi Arabia and the Russian Federation, to curb terrorism, organized crime and illicit weapons trade in Central Asia. The program, which will be implemented in 2020-21, seeks to establish preventive mechanisms to make the world a safer place.
The Cabinet also lauded plans to develop the Jafurah gas field, which will be developed with a $110 billion investment.
The ministers stressed the Kingdom’s commitment to diversifying its economy, benefiting from its resources and bolstering its pioneering position in the global energy market.
The Jafurah field — which lies southeast of Ghawar, the world’s largest conventional oil field — holds an estimated 200 trillion cubic feet of wet gas, and is capable of producing 130,000 barrels per day of ethane and 500,000 barrels per day of gas liquids and condensates.

HIGHLIGHTS

• A UN project to curb terrorism, organized crime and illicit weapons trade in Central Asia was discussed.

• Saudi Arabia vows to use all available policy tools to achieve sustainable growth.

• A new system of ownership and management of real estate units approved.

Over 22 years, Jafurah could generate $8.6 billion a year in income and contribute $20 billion a year to the Kingdom’s gross domestic product.
The development of the Jafurah field will have ramifications not just for Saudi Arabia and its drive toward a cleaner energy mix, but also for the global gas market.
The Cabinet was also briefed about King Salman’s talks with US Secretary of State Mike Pompeo that took place in Riyadh last week. The talks tackled regional and international developments.
The ministers also reviewed the outcome of the first meeting of the finance ministers and central bank chiefs of the Group of 20 (G20) countries. The Cabinet reaffirmed Saudi Arabia’s commitment to using all available policy tools to achieve sustainable growth.
The ministers also approved a new system of ownership and management of real estate units. 


It was Russia, not Saudi Arabia, that pulled out of OPEC+ deal: Saudi ministers

Updated 04 April 2020

It was Russia, not Saudi Arabia, that pulled out of OPEC+ deal: Saudi ministers

  • Saudi foreign and energy ministers say Moscow's claim that Kingdom withdrew from the OPEC+ deal was unfounded
  • They said it was Russia that abandoned the agreement, leading to a collapse in world oil prices

RIYADH: Saudi Arabia's foreign and energy ministers on Saturday denied Russia's claim that the Kingdom abandoned the OPEC+ deal, leading to a collapse in world oil prices.

In a statement carried by the Saudi Press Agency (SPA), Foreign Minister Prince Faisal bin Farhan said "a statement attributed to one of the media of President Vladimir Putin of the Russian Federation claimed that one of the reasons for the decline in oil prices was the Kingdom's withdrawal from the deal of OPEC + and that the Kingdom was planning to get rid of shale oil producers."

"The minister affirmed that what was mentioned is fully devoid of truth and that the withdrawal of the Kingdom from the agreement is not correct," the statement said.

In fact Saudi Arabia and 22 other countries tried to persuade Russia to make further cuts and extend the deal, but Russia did not agree, it said.

Prince Farhan expressed surprise that Russia had to resort to "falsifying facts" when Saudi Arabia's stance on shale oil production is known, the statement said.

He pointed out that Saudi Arabia is one of the main investors in the energy sector in United States, implying that there is no reason for the Kingdom "to get rid of shale oil producers" as Russia has claimed.

He further said the Kingdom "is also seeking to reach more cuts and achieve oil market equilibrium for the interest of shale oil producers."

OPEC+ refers to the cooperation between members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil producers. The cooperation deal which called for cuts in production by the producers was meant to stabilize oil prices. 

In a separate statement, Saudi Energy Minister Prince Abdulaziz bin Salman rejected Russian Energy Minister Alexander Novak’s similar claim that the Kingdom refused to extend the OPEC+ deal and withdrew from it.

Novak "was the first to declare to the media that all the participating countries are absolved of their commitments starting from the first of April," Prince Abdulaziz said in a statement.

He said Novak's statement led other countries to decide "to raise their production to offset the lower prices and compensate for their loss of returns." 

On Thursday, Saudi Arabia called for an urgent meeting of oil exporters after US President Donald Trump said he expected the Kingdom and Russia to cut production by 10-15 million barrels per day.

Prince Farhan said he was "hoping that Russia would take the right decisions in the urgent meeting" so that a "fair agreement that restores the desired balance of oil markets" could be achieved.

The global oil market has crashed, with prices falling to $34 a barrel from $65 at the beginning of the year, as a result of the coronavirus pandemic. 

Fuel demand has dropped by roughly a third, or 30 million barrels per day, as billions of people worldwide restrict their movements.

A global deal to reduce production by as much as 10 million to 15 million barrels per day would require participation from nations that do not exert state control over output, including the United States, now the world’s largest producer of crude.

A meeting of OPEC and allies such as Russia has been scheduled for April 6, but details were thin on the exact distribution of production cuts. No time has yet been set for the meeting, OPEC sources said.